Highlight on Illinois: Little Progress Made in Bridging ALL KIDS Administrative Gaps

The Illinois Department of Healthcare and Family Services (HFS) and the state Department of Human Services (DHS) have not been successful in correcting ongoing administrative problems in the Expanded All Kids health insurance program, according to a state Auditor General report. The program, formerly known as KidCare, provides health coverage for children with family incomes up to 300 percent of the federal poverty level (FPL), as well as all undocumented children, through age 18. The report noted ongoing problems, including failure to complete required eligibility redeterminations and issuing proper determinations of documented status, in fiscal year (FY) 2013 that were that were present at the time of the FY 2012 audit. The Auditor General renewed its recommendations for improvement and will revisit the issues when it performs its sixth annual audit for FY 2014.

Expanded All Kids

Since July 1, 2006, the All Kids program has provided health insurance coverage to eligible children whose families cannot afford private insurance. Prior to that time, the KidCare program provided coverage for children with family incomes up to 200 percent of the FPL. The All Kids program, however, allowed for coverage for children with family incomes above 200 percent of the FPL and undocumented immigrant children. Coverage was limited to children up to 300 percent of the FPL on July 1, 2011.

The Auditor General’s report focused on the population of children who are eligible for coverage as a result of the July 1, 2006 expansion and refers to that group as “Expanded All Kids.” In FY 2013, which ended June 20, 2013, 1.9 million children were enrolled in the All Kids Program, but only 84,563 were enrolled through Expanded All Kids. Of the 58,822 children enrolled in Expanded All Kids on June 30, 2013, 68 percent were classified–sometimes incorrectly–as undocumented immigrants. The Auditor General is required to audit the program annually beginning on June 30th of each year.

Annual Eligibility Redeterminations

The Covering ALL KIDS Health Insurance Act (215 ILCS 170) requires HFS to review recipients’ eligibility determinations, including income requirements, on an annual basis. The Auditor General reported as early as FY 2009 that the necessary audits were not being properly conducted. In its FY 2013 report, the Auditor General noted that HFS failed to conduct 32 percent of its self-reported 34,952 required Expanded All Kids redeterminations. Pursuant to Public Act 97-0689, HFS contracted with an outside vendor, Maximus Health Services, Inc. (Maximus) to assist in eligibility redeterminations. Maximus completed 2,874 eligibility redetermination recommendations, suggesting that 2,779 recipients be cancelled. However, the American Federation of State, County and Municipal Employees disputed the requirement with an arbitrator, who determined that state employees should perform redeterminations. In its next audit, the Auditor General will review work and recommendations completed by state caseworkers.

Classification of Documented Immigrants

The report uncovered a number of instances in which enrollees were labeled as undocumented immigrants when they were actually documented immigrants or U.S. citizens. On June 4, 2013, HHS notified HFS that the state would receive federal reimbursement in the amount of 65 percent of eligible costs for citizens and documented immigrant children with family incomes up to 300 percent of the FPL, regardless of the amount of time they had been in the United States. Reimbursement is retroactive to April 1, 2009. Misclassification of an All Kids recipient as undocumented would thus prevent the state from receiving federal funding.

Previously, HFS only received reimbursement for documented immigrants who had been in the country for five years. HFS officials reported in the course of the FY 2009 audit that documented immigrants who had been in the country for less five years were marked as undocumented to avoid confusion about reimbursement issues. Later audits reported system errors and matching problems with the Social Security Administration. FY 2013 data revealed that 8,795 immigrants with verified social security numbers and/or alien registration numbers who may have been documented utilized services costing $6.4 million. In fact, a sample of recipients classified as undocumented who had both verified social security number and alien registration numbers revealed that all were documented.

Renewed Recommendations

In its FY 2012 report, the Auditor General made 10 recommendations. Two recommendations that related to non-payment of premiums and optical edits were addressed by HFS and DHS. The eight remaining recommendations, five of which applied only to HFS, were repeated. In addition to eligibility redeterminations and classification of documented immigrants, the recommendations dealt with data reliability, duplicate claims, eligibility documentation, transportation claims, guidance over preventive medicine service claims, and inconsistent dental policies. Of particular note were findings that 86 of 283 individuals who were enrolled under more than one identification number were noted as having duplicate enrollments in the FY 2011 report and that 154 recipients received services totaling $111,004 after the month of their 19th birthday. The departments concurred with all recommendations.